Hello,
I know Turbotax fills out Form 8938, but after conducting extensive research, I believe I have a solid understanding of what I need to do for my Form 8938. If anyone can help me get to the right direction, I would truly appreciate it. Please note that this is a high-level overview of my plan. If I’m making any mistakes or missing something important, I’d appreciate any corrections or guidance.
Information to Input on Form 8938:
Part 1 (Lines 5, 6, 9): Since we have both CDs and regular bank accounts, we need to report the total number of accounts and their combined maximum value during the year.
Part 2 (Lines 10-11):
We need to enter "1" in Line 10, as we have one foreign life insurance policy with a cash surrender value.
Line 11 will reflect its maximum value during the year.
Part 3 (Line 13a): The only foreign income we earned was interest from our CD accounts. I believe we should report only the total interest earned from these accounts here.
Part 4: (Skip) This section does not apply to our situation.
Part 5: (Foreign Bank Accounts)
We need to report both open and closed foreign bank accounts.
For account type, we should select "Deposit" for all CDs and regular bank accounts.
We then provide the required details (institution name, account numbers, maximum values, etc.).
Part 6 (Lines 29-34):
This section is for foreign financial assets that are not held in financial accounts.
Since we have a foreign life insurance policy with a cash surrender value, we need to report it here with all relevant details.
What We Do Not Need to Report:
We own a rental property abroad, but from my understanding, this is not considered a financial asset for Form 8938 since it is personal property that we lease out. Therefore, it does not need to be reported on this form.
